The best part about using leverage, it makes a massive impact on capital efficiency. So profits are decent in the short-term, but there’s also a much more considerable return on investment over a much shorter time period.
Leverage ratio got to be maintained at such a level where if the trade goes in the opposite direction (as we have all seen) because of a sudden news flash or something, the losses shouldn't be such that our account is blown. Its happened with me so many times that despite the use of sl (as it is I'm not very ambitious with its placement - I keep it close to my entry) I have suffered loss because of leverage that I would be much happier without. Now I am a firm believer of not using leverage. If my trade strategy isn't good enough and can't get me profits as it is, it's no good a strategy and needs modification.
BarronLucas posted: Using high leverage does have higher risks and possibilities of blowing up your account.
When a trader uses high leverage and losses in a trade the loss is higher as the leverage and would be difficult for the trader to invest in the next trade.
Yes, true! But everyone here is talking about using leverage the right way. If you know risk management and money management, you won’t take any unnecessary steps, be it using high leverage or something else. It is all about knowing what you are doing.
Of course! High leverage means high risk. But don’t you think it can be managed? Why would anyone take a high risk that they have no idea about? It is nothing more than inviting a loss. Be careful about the decisions you make and don’t forget that there are more losses in the market than profits.
I don’t see any point in believing that high leverage can be harmful to your trading account. For me, the more leverage, the better the trades. I use leverage up to 1:200 with swissquote and xtb. I do make losses but they all get recovered after I make profits. I don’t think you can have a successful trading career without taking risks.
The market moves can be quite unpredictable. But if you won’t take risks, you won’t be able to make profits. If not high leverage, you can start with using low leverage and increase it with time. It is better not to take risks when you know what the clear result will be.
No one wants to lose, right? But I don’t understand why traders refrain from analysing the market before making such bigger moves that result in nothing more than losses. Trading is a risky job and it must not be taken lightly. I have been into trading for the last few years but there hasn’t been any strategy that I applied directly on my live account. I demo trade with pepperstone every time I see profitable market conditions to use leverage. It’s a longer procedure but I’m in no hurry to lose :)
HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors.
Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance.
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